As desperation increases for solutions to the Eurozone crisis, the rest of the world’s economy isn’t safe from the financial effects of the catastrophic Euro, especially small businesses. Those who own small businesses are at risk too from getting swallowed up in the Eurozone crisis so what will happen to small businesses if the Eurozone collapses?
Help my money is in Greece!
Ambiguity in Greece has caused hefty withdrawals of funds from the Greek banks. The consequences of the recent political election saw €700m to €1.2bn taken out of the Greek banks leaving the Greek government and its population in an increased state of despair.
Although if the Greek banks were to collapse, then the European rules affirm that people with savings should have deposits of up to €100,000 protected but only if the Greek banks and government can stick by and uphold this agreement.
My business isn’t in the Eurozone; I’ll be fine won’t I?
Britain may be at the front line of the Eurozone crisis but just because we’re not included in the Eurozone doesn’t mean we are not affected. The current situation in Europe could contribute to countries outside of the Eurozone including the UK.
It is important to understand where the entire chain of your business is from customers to suppliers. If your business sold clotted cream but your packager was in Greece then you may find yourself in a spot of trouble depending on your supplier’s economic situation. If you have a good supply chain strategy you won’t be likely to get caught out by the Eurozone crisis.
Should my business widen its client base?
If your client base is predominantly in the Eurozone it might be a clever idea to think strategically about whether it’s worth widening your client base to other countries diverting the worst affected areas of the Eurozone. Moving your client base doesn’t have to be a big move, you could simply start thinking about Germany or Sweden for example.
Are there any benefits for UK businesses and the Eurozone?
Yes there are. Businesses that are bringing goods into the UK from the Eurozone are far better off due to cheap imports. Due to the Euro being at such a low price UK companies are now able to discount goods in order to intensify competitiveness with opponent or similar businesses or to broaden profit margins.
With the Greek elections in June 2012, it is likely that the results of this could lead to Greece’s exit out of the Euro and the eventual collapse of the Eurozone. As countries such as the UK and Switzerland are getting ready and creating strategic contingency plans for their countries just in case the Eurozone does collapse, you should start implementing contingency plans for your business too.